Correlation Between Nuveen Preferred and Nuveen Symphony

Can any of the company-specific risk be diversified away by investing in both Nuveen Preferred and Nuveen Symphony at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Nuveen Preferred and Nuveen Symphony into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nuveen Preferred Securities and Nuveen Symphony Floating, you can compare the effects of market volatilities on Nuveen Preferred and Nuveen Symphony and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Nuveen Preferred with a short position of Nuveen Symphony. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Preferred and Nuveen Symphony.

Diversification Opportunities for Nuveen Preferred and Nuveen Symphony

0.32

Correlation Coefficient

Nuveen Preferred  Nuveen Symphony

Weak diversification

The 3 months correlation between Nuveen and Nuveen is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Preferred Securities and Nuveen Symphony Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Symphony Floating and Nuveen Preferred is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Nuveen Preferred Securities are associated (or correlated) with Nuveen Symphony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Symphony Floating has no effect on the direction of Nuveen Preferred i.e., Nuveen Preferred and Nuveen Symphony go up and down completely randomly.

Pair Corralation between Nuveen Preferred and Nuveen Symphony

Assuming the 90 days horizon Nuveen Preferred Securities is expected to under-perform the Nuveen Symphony. In addition to that, Nuveen Preferred is 1.42 times more volatile than Nuveen Symphony Floating. It trades about -0.03 of its total potential returns per unit of risk. Nuveen Symphony Floating is currently generating about 0.15 per unit of volatility. If you would invest  1,813  in Nuveen Symphony Floating on September 24, 2024 and sell it today you would earn a total of  8.00  from holding Nuveen Symphony Floating or generate 0.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Nuveen Preferred Securities  vs.  Nuveen Symphony Floating

Nuveen Preferred Sec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Preferred Securities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Nuveen Preferred is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nuveen Symphony Floating

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Symphony Floating are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Nuveen Symphony is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nuveen Preferred and Nuveen Symphony

The main advantage of trading using opposite Nuveen Preferred and Nuveen Symphony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Preferred position performs unexpectedly, Nuveen Symphony can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nuveen Symphony will offset losses from the drop in Nuveen Symphony's long position.

The idea behind Nuveen Preferred Securities and Nuveen Symphony Floating pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.